The two most important financial metrics which mortgage companies consider when deciding whether to qualify you for a commercial or residential loan are your credit score and your debt-to-income (DT) ratio.
A high credit score can help to offset issues with your debt-to-income ratio. But if your DTI ratio is particularly high, that can still make it challenging to qualify for a mortgage.
But it does not have to stop you. There are situations where a borrower might have a high DTI ratio, yet still be able to afford to pay on a new home or commercial loan.
The right mortgage company will recognize that reality and offer solutions.
Why Your DTI Ratio Might Not Be Ideal:
- You are just starting out, and your income is not yet at a high level, but you have significant debt. If you are on a solid career track and/or your real estate investments may add directly or indirectly to your income, you may be a viable borrower despite your high DTI ratio.
- You are a real estate investor. The debts on your existing properties might raise your DTI ratio substantially, but not tell the full story of your financial viability.
If you are in a situation like this, there are a couple of approaches which might make it possible for you to qualify for a competitive mortgage despite the high DTI ratio.
1. See if you qualify for a loan with loose DTI ratio requirements.
For residential borrowers, there are some programs such as FHA which are aimed in part at those whose DTI ratios may not be as low as would be ideal.
Since these types of loans have more relaxed requirements, you might be able to qualify for one even with your higher DTI ratio.
2. Apply for a no ratio loan.
Another solution which is applicable to residential and commercial borrowers is what is known as a “no ratio loan.”
This is any type of mortgage where you do not need to provide your debt-to-income (DTI) ratio.
Typically, this means that when we talk about no ratio loans, we are referring to stated income loans, also known as bank statement loans.
When you apply for such a loan, you do not need to document your income with pay stubs, tax returns, or W-2 forms.
Other factors are assessed to determine whether you qualify for financing. For example, a lender might look at your credit score, your assets, your financial liquidity, the amount you are willing to put down on a loan, and other factors which help to establish your financial stability and means.
Apply for a No Ratio Loan Through Lending Bankers Mortgage Now
As a residential and commercial lending company in Florida, we are used to doing business with borrowers who invest in real estate and have other nontraditional income situations.
We have qualified many borrowers throughout the state for competitive loans even without ideal DTI ratios.
Whatever your DTI ratio is, we want to help you get the fast and affordable financing you need for your real estate purchase. To schedule your consultation, please give us a call today at 786-220-1100. We look forward to qualifying you for the most suitable loan.